FERC postpones financial trades in NY market


The Federal Energy Regulatory Commission denied last week Morgan Stanley Capital Group Inc.�s application to force the New York Independent System Operator (ISO) to permit financial bids in the wholesale power market by entities with no generating capacity or customers to serve in that state.

The item had been scheduled for discussion at Wednesday's meeting, but FERC issued an order on the matter ahead of time.

Morgan Stanley had challenged the NYISO rule that only allowed participation in the New York wholesale power market by entities with generation or customers to serve.

But that will change.

�It�s not if, it�s more when,� says Ken Klapp, spokesman for the ISO. �We have full intentions of building it (financial trades) into the system.�

Meanwhile, the ISO disallowed financial transactions in the New York power market now because it�s primary objective is to get the physical markets working smoothly first. Just launching those markets in December of last year required a number of adjustments to software and market design. The ISO wants to get the physical markets to function efficiently before it alters the software to accommodate financial trades, says Klapp.

The ISO is just not ready to establish rules and software for financial trades when there is still some risk that the physical markets could be manipulated for windfall profits unrelated to supply and demand, the ISO explained in its release.

�When we have confidence that efficient operation has been achieved and that market gaming opportunities have been addressed, we will be better positioned to consider some of the market enhancements,� William J. Museler, president and CEO of the ISO, said.

FERC did order the ISO to develop a plan for including financial trades of power into the New York market by January 2001. The agency will review that plan. But there is no timetable for the ISO to implement any of those changes yet.

Related Articles

MARKET WATCH: Crude oil futures end week above $100/bbl mark

03/31/2014 The New York Mercantile Exchange May crude oil contract was up 39¢ on Mar. 28, closing at $101.67/bbl. The June contract increased 36¢ to settle at...

API report unveils economic gains from US crude exports

03/31/2014 A recent study details significant US jobs gains, reduced consumer fuel costs, and robust economic growth associated with future crude oil exports,...

MARKET WATCH: Crude oil futures sustain $100/bbl price level

03/28/2014 Crude oil futures prices on the New York Mercantile Exchange sustained levels above $100/bbl during trading on Mar. 27 after breaching that thresho...

IHS: Western sanctions indirectly could hinder Russian oil, gas revenues

03/27/2014 Western sanctions imposed against Russian government officials and business executives regarding Russia’s conflict with Ukraine could slow the avai...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected